New Zealand’s winemaking industry is set for further success in coming years, according to new research from Westpac, although winemakers focusing solely on the domestic market are likely to struggle.
Westpac Industry Economist, Paul Clark, said the industry has been a real success story.
“From relatively humble beginnings, the industry has more than quadrupled the amount of grapes it produces annually and currently pumps out five times the volume of wine it made at the turn of the century.” Clark said most of this is because of growth in exports, which have been underpinned by a growing appetite for the distinctive taste of New Zealand’s wines.
“Exploiting opportunities will depend on whether winemakers in New Zealand can differentiate their wines from those produced by competitors in other countries,” he said. “Those who are able to do so are much more likely to attract the attention of distributors, who offer access to end consumers.”
“Those not able to gain a foothold in export markets are likely to face tougher times in a domestic market characterised by declining levels of per capita consumption. The bulk buying power of large domestic retailers, notably supermarkets, is likely to mean wafer thin margins.”
Limited opportunities in the domestic market and the potential for big gains in the export market are likely to shape the industry going forward.